Don't Believe the Hype About the Plug-In Car

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Hybrid gasoline-electric and all-electric cars will continue to cost more than vehicles with a conventional internal combustion engine for the foreseeable future, putting the new technology beyond the reach of many car buyers.

Sales of hybrid and all-electric cars therefore may be limited to affluent buyers who can afford to make an environmental statement and the vast majority of vehicles will continue to be powered by gasoline or diesel engines. While promising, the new lithium-ion battery technology won't significantly reduce pollution or dependence on foreign oil by 2030.

"Lithium-ion battery technology has been developing rapidly, especially at the cell level, but costs are still high, and the potential for dramatic reduction appears limited," the National Research Council says in a report. "…Costs are expected to decline by about 35% by 2020, but more slowly thereafter. Projections of future battery pack costs are uncertain, as they depend on the rate of improvement in battery technology and manufacturing techniques, potential breakthroughs in new technology, possible relaxation of battery protection parameters as experience is gained, and the level of production."

The study on electric cars was sponsored by the US Department of Energy, National Academy of Sciences, National Academy of Engineering, Institute of Medicine, and the National Research Council. Each is a non-profit institution or government agency.

Toyota (TM), the world's leading manufacturer of hybrid gasoline-electric cars, hopes to sell "several tens of thousands" of a new plug-in version of its Prius worldwide starting in 2011. Other carmakers, including Honda (HMC), Ford (F), Nissan, General Motors, and start-ups such as Tesla Motors are developing new models that can run in part or entirely on electricity.

Toyota's plug-in car, which can be recharged using household current, first runs only on electricity drawn from a lithium-ion battery. A gasoline engine kicks in after about 14 miles and the car then runs on a hybrid gasoline-electric system. The estimated miles per gallon is an astounding 134, or about 283% more than the highway estimate for Toyota's gasoline-powered 2010 Corolla.

Based on the current state of the technology, the cost of a plug-in hybrid electric vehicle, known as a PHEV in the trade, will be about $18,000 higher than a conventional vehicle, including a $14,000 battery pack. That means it will take years, and perhaps longer than the vehicle's useful life, to recover the upfront costs of plug-in hybrid vehicles despite the lower per-mile cost of operation.

The report by the National Research Council raises basic questions about government mandates expanding the use of hybrids and all-electric cars as well as the ability of the nation's electric grid to handle the additional load required to recharge the batteries.

If the batteries are recharged at night when demand for electricity is low, the National Research Council says the existing power grid can handle the additional demand created by millions of plug-in hybrid cars. But what happens to the nation's grid if millions of people seek to recharge their hybrid vehicles each day after work? Or worse, what happens if many owners, cognizant of the limited charge in the battery, ignore daily peak demand and give their cars a quick jolt while at work, when stopping at the supermarket or at a friend's house?

It will take about eight hours to recharge a hybrid car's battery using 110-volt current commonly used in homes. In a recent report, the Electric Power Institute, an independent nonprofit organization based in Palo Alto, California, says the US now has enough capacity to charge 1 million electric vehicles at night. This suggests you shouldn't get charged up about the electric car -- at least not yet.

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